Property tax: Now, BMC to send flat owners individual bills

This individual or personalised billing system will be applicable to all new building projects that acquire Occupancy Certificates (OC) after April 1, 2018.

FOR BETTER transparency in property tax assessment and with an eye on reducing litigations, the Brihanmumbai Municipal Corporation (BMC) will now send property tax bills to individual flat owners in all new building projects.
This individual or personalised billing system will be applicable to all new building projects that acquire Occupancy Certificates (OC) after April 1, 2018.

According to the current system of assessing property tax, the civic body issues a single bill to a housing society. The society’s executive committee then divides the bill amount among members, collects their payments and makes the payment. The BMC’s acknowledgement of payment received is also in the name of the housing society, this recognising the housing society as owner of the property while flat-owners are merely occupants.

“There is always a tussle between a newly formed housing society and the builder on who will pay the property tax. Hence, we have taken a decision to issue individual bills to flat owners of the building and not to the society,” said Sanjay Mukherjee, additional municipal commissioner (Projects).

“In case of unsold flats, the developer will have to make the payment,” he added. Officials said the problem with the existing system is that when some members default on payments, all members are penalised. “Sometimes, BMC has to move court against societies as some members have not made the payment, rendering the entire society account as a defaulter. Some cases go on for years, leading to BMC’s revenue being locked in litigation. Some societies decide to pay up from the reserve fund to avoid the hassle but that leads to shifting of the burden on other occupants/members who pay their taxes diligently,” said Devidas Kshirsagar, assessor and collector (in-charge) of BMC.

The BMC already offers societies the option of passing a resolution within the society and then seeking individual or personalised property tax bills for every member. This is, however, possible only for societies where there is no outstanding dues. Some societies have opted, though the large majority still continues with the common billing system.

At present, there are 2.75 lakh tax eligible buildings from which the BMC collects property tax. These 2.75 lakh buildings have a total 28 lakh flats or units. Of these, only 1.42 lakh flat owners have already opted for individual or personalised property tax bills.

The optional system also means that individuals who wish to seek a personalised bill cannot do so unless society arrears are cleared. In addition, flat owners require the society’s no objection certificate.

“To avoid inconveniencing diligent tax payers and housing societies, we have taken this decision to mandatorily send individual property tax bills for new buildings. Besides, this will also address issues such as societies collecting larger sums from members than the bill sent by the BMC. Further, it will avoid litigations and bring in more transparency,” said Kshirsagar.

“It is a great move and should be appreciated. This will be of immense help to regular property tax payers. We welcome the move,” said Vinod Sampat, an expert in co-operative housing society laws.